Crypto and Digital Asset Disclosure
Crypto and Digital Asset Disclosure in Family Law Property Settlements
Cryptocurrency and digital assets are no longer niche. They’ve become mainstream investments, with Bitcoin, Ethereum, NFTs, and stablecoins held by everyday Australians as well as high-net-worth individuals.
But when relationships break down, these assets can complicate property settlements. Unlike traditional bank accounts, crypto can be volatile, decentralised, and harder to trace—making disclosure a critical issue in family law.
If you’re entering a separation or divorce and you or your partner hold digital assets, this guide will help you understand how disclosure works, what courts expect, and what steps you can take to protect your interests.
Why Digital Asset Disclosure Matters
In family law, both parties are required to provide full and frank disclosure of all assets, liabilities, and financial resources. That obligation extends to digital assets like:
- Bitcoin, Ethereum, and other cryptocurrencies;
- NFTs (non-fungible tokens);
- Stablecoins and tokenised assets;
- DeFi (decentralised finance) holdings;
- Digital wallets and exchanges across multiple jurisdictions.
- Failure to disclose can result in penalties, cost orders, or the reopening of settlements years later. Courts treat concealment seriously, whether the asset is a house, a share portfolio, or a crypto wallet.
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The Challenges of Crypto Disclosure
- Unlike cash in the bank, crypto is:
- Highly volatile — values can swing dramatically in days;
- Decentralised — assets can be moved across borders quickly;
- Pseudonymous — wallets may not carry names, but can still be traced;
- Easily concealed — coins can be held offline on hardware wallets or split across multiple exchanges.
- For these reasons, crypto disputes often involve forensic investigation. If you suspect your partner is hiding digital assets, subpoenas to exchanges, blockchain analysis, and expert evidence may be required.
How Courts Approach Crypto in Property Settlements
Courts apply the same framework used for other assets:
Identify and value all assets and liabilities
Both parties must disclose every wallet, exchange account, and digital asset they own or control. Valuation may involve expert reports, blockchain tracing, or exchange records. Because values fluctuate, courts sometimes order an average or fix a specific date for valuation to ensure fairness.
Assess contributions
If one partner invested in crypto during the relationship, the court considers who contributed funds or effort to that investment. For instance, if you managed the household while your partner devoted time and money to trading crypto, your indirect contributions are still recognised.
Account for future needs
If one party retains volatile assets like crypto, the court may balance the settlement with more stable property for the other party. This ensures one person isn’t left at an unfair risk of loss while the other enjoys certainty.
Ensure the outcome is just and equitable
Ultimately, courts want fairness. If evidence shows deliberate concealment or reckless speculation with marital funds, courts can adjust the division to protect the innocent party.
Case Law and Real-World Examples
While Australian courts are still developing a body of case law on crypto, parallels can be drawn from property settlement cases involving hidden or complex assets. Courts have repeatedly ruled that:
Assets not disclosed at settlement can justify reopening a case.
Even years later, if significant crypto holdings were hidden, a court can set aside the original settlement.
Control is as important as ownership.
If one partner has control over the wallet keys, the court may treat those assets as part of the property pool, even if they argue it “belongs” to someone else.
Valuation must be realistic.
Courts recognise crypto volatility. Parties may need to agree on a valuation date (e.g., date of separation, mediation, or hearing) to avoid unfairness caused by wild price swings.
For example, imagine a case where one partner withdrew $200,000 in Bitcoin from a joint account during separation and claimed it had “lost value.” If the blockchain record shows transfers to a wallet they control, the court can add that notional value back into the pool, applying principles similar to those in earlier add-back cases like Kowaliw.
Practical Steps If You or Your Ex Hold Crypto
1. Get expert legal and financial advice
Crypto law is evolving, and not every lawyer or accountant understands the nuances of digital assets. An experienced family lawyer working with forensic accountants can help you identify, trace, and value holdings.
2. Preserve evidence early
Take screenshots of wallets, transaction histories, and exchange accounts. If you have access, export CSV records before access is cut off. Preserving evidence now can prevent disputes later.
3. Request disclosure and use discovery tools
You can request your ex’s wallet addresses, exchange records, and transaction histories. If they refuse, subpoenas to exchanges and blockchain tracing experts can uncover hidden holdings.
4. Consider interim measures
If you suspect assets may be moved, courts can issue freezing orders to stop transfers. This prevents dissipation of funds during proceedings.
5. Be prepared for volatility
Agree on a valuation method early. This may involve fixing the value at a set date, taking an average over a period, or allocating risk by awarding crypto to the party most willing to manage the volatility.
Hypothetical Scenarios
- Hidden Wallets: Your ex claims they only hold $5,000 worth of crypto, but you know they were trading heavily in 2021. By subpoenaing major exchanges and reviewing blockchain data, your lawyer discovers $150,000 worth of coins in undisclosed wallets. The court adds this back into the pool.
- Volatility at Play: You and your partner separate when Bitcoin is valued at $40,000. By the time of the trial, it has dropped to $25,000. The court agrees to fix the value at the date of mediation to avoid unfair windfalls or losses to either party.
- NFT Collections: Your ex owns NFTs linked to digital artwork. While difficult to value, expert reports assess the market based on comparable sales. The court includes the collection in the property pool, treating it like any other asset.
Crypto as a Financial Resource
Sometimes, courts classify crypto not as property but as a financial resource, especially where access or control is indirect. For example, if your ex regularly receives crypto distributions from a family trust or business, the court may treat this as an ongoing financial resource that justifies adjusting the division of assets in your favour.
Risks of Non-Disclosure
- Failing to disclose crypto is as serious as failing to disclose cash or property. The risks include:
- Adverse inferences, with the court assuming the hidden assets exist and adjusting the pool against the non-disclosing party.
- Cost orders require the dishonest party to pay the other’s legal fees.
- Re-opening of final settlements if hidden assets are discovered later.
- Possible criminal consequences if disclosure obligations to the court are deliberately breached.
Future-Proofing with Agreements
For professionals or high-net-worth individuals holding crypto, Binding Financial Agreements (BFAs) or prenuptial agreements can help protect these assets. By specifying how digital holdings will be treated in the event of separation, you reduce uncertainty and protect against future disputes.
Crypto and digital assets are now firmly part of the property landscape in Australian family law. While their volatility, anonymity, and complexity pose challenges, the principles of disclosure and fairness remain the same.
If you’re going through a separation:
- Assume disclosure obligations cover every wallet, coin, and NFT.
- Don’t ignore red flags—suspicious withdrawals, missing funds, or sudden transfers may signal hidden crypto.
- Get expert help early—both legal and forensic.
- Be proactive about evidence, valuation, and risk allocation.
- By approaching crypto disclosure strategically, you protect your financial future and ensure that property division remains just and equitable, no matter how digital your assets are.